Panel backs homebuyer guides for Bluffton affordable housing

Bluffton officials are closing in on setting conditions for qualifying home buyers to reach the American dream, as Mayor Pro Tem Fred Hamilton Jr. repeats is the aspiration, through the Wharf Street affordable housing program.

A set of conditions for qualifying low to moderate income households earning up to 80 percent of Beaufort County’s median income is up for Town Council adoption.

The Affordable Housing Homeownership and Program Guide is on the agenda for council’s 6 p.m. Tuesday meeting at Town Hall, 20 Bridge Street.

The Affordable Housing Subcommittee made some revisions in a staff proposal Thursday and unanimously recommended the plan for council adoption. The panel includes Mayor Pro Tem and committee Chairman Fred Hamilton Jr. and Mayor Lisa Sulka, two of the council’s five members. Other committee members are Thomas Viljac, the Planning Commission chairman, and banker Dee Anderson.

Requirement highlights include:

• Meeting first-time home buyer definitions of the U.S. Cranston-Gonzalez Act of 1990 and U.S. neighborhood stabilization program requirements. Waivers, for instance, could include owning a house not up to go code.

• Having a minimum credit score of 625 to be eligible

• Passing a criminal background check, a committee addition. Following HUD guidelines, it would disqualify applicants with felony convictions in the past five years and go back more years for drug sale or domestic violence convictions, according to consultants Erich Chatham of Civitas LLC, Charleston, and Shirley Wilkins, formerly with the Beaufort Housing Authority

• Meeting eligibility requirements for household income to not exceed 80 percent of HUD’s median income limit for Beaufort County. Beaufort County’s average median income of $68,900. Based on household size, 80 percent ranges from $38,600 for a one-person household to $55,100 for a four-person household.

• Completing a home ownership course. Plans are for four sessions of 2 hours each. Backup applicants would replace dropouts who couldn’t qualify and be caught up.

• Restricting resales, for the first 25 years after a purchase agreement, to households with incomes of 80 percent or less of median income. This is to discourage driving up prices and flipping the houses for a profit.

• Using a scoring system that gives the highest priority to applicants making the most points for various town or Beaufort County ties, starting with 50 points for living in Greater Bluffton — basically the 29910 ZIP code — for at least 5 years and working in it two years.

Chatham said such restrictions inhibit resales and opportunity to “build wealth” and Civitas recommended allowing resales without restrictions after 15 years.

But Viljac said, “I have a major problem with it being an investment opportunity” and a focus should be kept on affordability. “I agree,” Hamilton said.

Sulka, a real estate agent, recommended the agreed-to 25 year cap and spoke against making it 99 years, like Charleston does. She said such a three-generation restriction was “way out of line.”

To help applicants qualify for mortgages and “move the homes quicker,” Chatham recommended the town put up a “soft second mortgage” effectively discounting the price by up to 20 percent. After five years in the home, a second mortgage could be forgiven at a rate of 20 percent a year.

Hamilton said a 20 percent soft mortgage “is not real money” that the town would put up, but instead would involve covenants, or restrictions, on the deed in exchange for the reduced price.

CRIMINAL CHECKS

Viljac said the criminal background checks should be stringent so bad elements don’t make the project “go south.” He said he wants the town to make sure “someone with a past conviction for selling crack cocaine … won’t be living there.”

Wilkins said that can be accomplished through a South Carolina Law Enforcement “instant background check,” but it’s for South Carolina only, so other checks should be used for residents who’ve recently lived out of state.

But Chatham said a sale is different than a rental with eviction clauses. “Once we sell it and sign off at the closing date, it’s out of our hands,” he said. “We don’t have a legal authority to inspect a house (after sale); that’s why we have to do the upmost vetting.”

Anderson said, “Do you think just because it’s affordable housing, you’ll have more criminal activity than in a regular plantation? Pretty much, cocaine dealers are not going to have a 625 credit score.”

Marc Orlando, Growth Management director and deputy town manager, said the screening will be “on the front end,” and “anything after that, it’s a police matter.

“We are filtering to get solid Bluffton residents in these houses that we believe in,” he added.

Hamilton said, “There’s only six houses …. We’re not going to build a ghetto; we’re not going to build a slum.”

Instead, he said, the program is building the “American dream” and giving opportunities to first-time homebuyers.

“We can’t satisfy those that don’t believe. They can find a million things wrong with building six houses,” Hamilton said.

Sulka said the program needs to include a strong criminal check

MORE STEPS

Prices are still being calculated, and a marketing plan should be ready by the end of the month, Chatham said.

Wilkins said work is under way to get lending partners and to hook up with a variety of down payment assistance programs.

After the policy is adopted and other details are worked out, the town will begin accepting and screening applicants interested in the six modular houses to be located on three corners of Wharf and Robertson streets, officials said.

In other business, Wilkins and Orlando reported on a proposed “Bluffton Home Series” by which the town could make pre-approved architectural plans for stick built, modular and manufactured housing — including those for the Wharf Street project — available for use elsewhere in town. Orlando said pre-approved plans would reduce staff review times, meet town architectural goals, and could come with reduced permitting fees.